The 5 Most Expensive US Cities To Retire In

The biggest expense in this city is rent," says Grace Weaver, a
91-year-old New York City native who has lived in the same
apartment building for more than 50 years. "I have a
rent-stabilized apartment, so I pay less than $1,000. If it
weren't for that, I couldn't live here."

Thanks to a pension Weaver describes as "decent" and such
investments as tax-free municipal bonds, Weaver says her
retirement has been relatively comfortable, although she has
always been frugal. She shops in thrift stores, including the
one in midtown where she volunteers three days a week. "You can
retire very well in New York City. There are lots of free and
cheap things to do, with the museums, theater and movies."
Weaver adds that life in New York City can be cheaper than in
other parts of the country, thanks to public transport. "I've
never had a need for a car, and that saves me hundreds of
dollars on insurance, gas, parking, maintenance -- plus the car
itself," she says.

Although the cost of some things in Manhattan are higher than
in the rest of the country -- for example, one doctor's visit
costs $163 on average in New York City, well above the national
average -- Weaver believes it's cheaper there than in Florida.
"Plus, who wants to deal with the heat and humidity?" Weaver
asks.

2. Honolulu

Before moving to Hawaii, Clif Purkiser lived in San Jose,
Calif., so he was accustomed to a high cost of living.
"The biggest issue is housing," he says. "It's just like the
Bay Area: If you can manage housing, you can find ways to
mitigate the costs of everything else."

As the third most expensive city in the country, San
Francisco is rarely a top spot for retirees, even with its
mild climate. But for Sandra Perkins, the city was the best
place to retire after her real estate career in Las Vegas was
abruptly cut short by the subprime financial crisis. "My
husband and I had saved just enough to move to my favorite
city on Earth, so we left," says Perkins.

Costs are much higher than in the Perkins' previous hometown;
with an average home price of nearly $814,000, buying was out
of the question. "We were skeptical about renting in
retirement, but there was little choice. We still worry about
having to downsize if our investment income can't keep up,"
Perkins says. "But we're both 59 -- so we're young enough to
move if we must."

Perkins says she copes with other high costs by being frugal
and shopping around. "Some produce is cheaper here than it
was in Vegas. A lot of my friends buy their food at co-ops,
but I try to buy in bulk to save. Fortunately, we have very
good private health insurance, so our health care costs
haven't changed since we moved." The average doctor's visit
in San Francisco costs about $125, but Perkins says, "We only
pay $20 when we see the doctor, minus prescriptions."

4. San Jose, Calif.

In San Jose, Calif., average energy costs are $243 per month,
compared to $172 in San Francisco. Food, medicine and
gasoline tend to cost about the same, but a car is a
necessity in San Jose.

Taxes are another issue in Hawaii. While the Aloha State
charges no sales tax, an excise tax is levied on all goods and
services. "This can make life more expensive than in the rest
of the country. The good part is that, in Hawaii, your pension
income is mostly exempt from taxes, and that can drop your tax
burden down quite a bit," Purkiser says.

Purkiser admits that most Americans would find it almost
impossible to retire in Hawaii, but he estimates $3,000 per
month could be enough for a retired married couple, on top of
housing costs. While housing in Honolulu runs about $2,700 a
month, "If you go outside of the city, you can rent a small
bedroom for $1,100 or $1,200 per month," Purkiser says. "Like
the rest of the country, there are some deals in the suburbs."

3. San Francisco

As the third most expensive city in the country, San
Francisco is rarely a top spot for retirees, even with its
mild climate. But for Sandra Perkins, the city was the best
place to retire after her real estate career in Las Vegas was
abruptly cut short by the subprime financial crisis. "My
husband and I had saved just enough to move to my favorite
city on Earth, so we left," says Perkins.

Costs are much higher than in the Perkins' previous hometown;
with an average home price of nearly $814,000, buying was out
of the question. "We were skeptical about renting in
retirement, but there was little choice. We still worry about
having to downsize if our investment income can't keep up,"
Perkins says. "But we're both 59 -- so we're young enough to
move if we must."

Perkins says she copes with other high costs by being frugal
and shopping around. "Some produce is cheaper here than it
was in Vegas. A lot of my friends buy their food at co-ops,
but I try to buy in bulk to save. Fortunately, we have very
good private health insurance, so our health care costs
haven't changed since we moved." The average doctor's visit
in San Francisco costs about $125, but Perkins says, "We only
pay $20 when we see the doctor, minus prescriptions."

4. San Jose, Calif.

In San Jose, Calif., average energy costs are $243 per month,
compared to $172 in San Francisco. Food, medicine and
gasoline tend to cost about the same, but a car is a
necessity in San Jose.

MaryAnn Ellison is a San Jose native who retired in her
hometown after a 30-year career. "My husband and I bought our
home over 35 years ago, and that alone has made it possible
to retire in this city," she says. "We paid our mortgage off
a long time ago and never got a home loan. That's a huge
mistake too many people made; then it blew up in 2008. … If
we'd taken a second mortgage like our friends, I'd probably
need to work into my 70s, or we'd have to sell the house and
move somewhere cheaper."

At $783,250, the average home price in San Jose is a bit less
than San Francisco's, but still far above national averages.
"I guess if we sold, we could have a more lavish lifestyle
someplace cheaper, but this is my home," MaryAnn said. "I'm
not going anywhere."

5. Stamford, Conn.

Less than an hour from Manhattan, Stamford has been a
favorite place for New York City professionals looking for
more space, more trees and less noise. As a result, the
city's average home price of $575,200 is far above the
national average, but a bargain compared to Manhattan's
average home price of $1.325 million. Still, high prices are
the norm for housing, food, energy and services. A doctor's
visit costs on average $132, slightly less than Manhattan's
$163, but more than in other parts of the country.
Connecticut has the fourth-highest health insurance premiums
in the country, according to a 2010 study by The Commonwealth
Fund, a private foundation focusing on health care policies.

"Health care is always a worry for seniors," says Ana Nelson,
executive director of the Stamford Senior Center. "Seniors
struggle in Stamford because it's so expensive, and costs
keep rising."

Tax burdens can be particularly challenging for retirees in
the state, since the state charges income tax on pensions and
annuity benefits. While Connecticut's earned income tax
credit helps lower the rates paid by lower-income residents,
retirees still face higher-than-average costs for food,
housing and electricity in Stamford. "It's not a cheap place
to retire," Nelson says.

Nevertheless, many retirees call Connecticut home, as the
state ranks among the most populous among the 65-plus crowd.

At $783,250, the average home price in San Jose is a bit less
than San Francisco's, but still far above national averages.
"I guess if we sold, we could have a more lavish lifestyle
someplace cheaper, but this is my home," MaryAnn said. "I'm
not going anywhere."

5. Stamford, Conn.

Less than an hour from Manhattan, Stamford has been a
favorite place for New York City professionals looking for
more space, more trees and less noise. As a result, the
city's average home price of $575,200 is far above the
national average, but a bargain compared to Manhattan's
average home price of $1.325 million. Still, high prices are
the norm for housing, food, energy and services. A doctor's
visit costs on average $132, slightly less than Manhattan's
$163, but more than in other parts of the country.
Connecticut has the fourth-highest health insurance premiums
in the country, according to a 2010 study by The Commonwealth
Fund, a private foundation focusing on health care policies.

"Health care is always a worry for seniors," says Ana Nelson,
executive director of the Stamford Senior Center. "Seniors
struggle in Stamford because it's so expensive, and costs
keep rising."

Tax burdens can be particularly challenging for retirees in
the state, since the state charges income tax on pensions and
annuity benefits. While Connecticut's earned income tax
credit helps lower the rates paid by lower-income residents,
retirees still face higher-than-average costs for food,
housing and electricity in Stamford. "It's not a cheap place
to retire," Nelson says.

Nevertheless, many retirees call Connecticut home, as the
state ranks among the most populous among the 65-plus crowd.